Less cash, more e-commerce for shoppers

It’s that time of year again. Shoppers are out in force and buying up big for the festive season, but for how much longer will they be using cash?

Cash is well on its way to becoming a collector’s item thanks to the ease of tap-and-go payment systems and online payments that have been growing in popularity in recent years.

Reserve Bank governor Philip Lowe believes Australia is at a turning point, with cash set to become a ‘niche payment’.

Australians are already the sixth highest users of electronic payments in the world, according to the RBA, with only 37 per cent of household spending now done using cash compared to 69 per cent a decade ago.

Professor of Economics Richard Holden says Australia could become a cash-free society in just three years.

The University of NSW academic says a fixed deadline would encourage individuals and businesses to make the switch.

‘Australia already has a sophisticated electronic infrastructure with among the highest penetration of cashless payment systems in the world,’ Prof Holden told AAP.

However while not needing to carry cash around at the shops is appealing for many, charities fear some of Australia’s most vulnerable people who are forced to beg on the streets will suffer without coin and note donations.

In 2017 the Salvation Army became one of the first charities to roll out tap-and-go facilities for their volunteer collectors.

Community fundraising general manager Andrew Hill said the Salvos had invested in 500 pay-as-you-go terminals for its Red Shield Appeal for collectors to carry.

But only one per cent of the $7 million raised was donated electronically, he said.

And at a cost of $650 for each device, plus merchant fees, the hardware is expensive.

‘Imagine this person comes to your door with just their mobile and asks you to tap your credit card. It doesn’t matter that they’re wearing credentials, you don’t know where those details are going,’ he said.

‘Whereas when you hand over a $5 note that’s it, you know nothing else can happen.’

Prof Holden is optimistic biometric technology, including facial recognition and fingerprint readers already used by smartphones, will solve security issues such a fraud.

But while many people and businesses are going cashless, the banks appear to be dragging their heels.

The RBA in February introduced its new payments platform, a real-time payments system which uses a simple identifier such as a mobile number or email address.

Dr Lowe has criticised the big four banks for their delay in rolling out the service.

‘In other countries where banks have been slow to develop payment applications that meet the needs of the public, other possibilities emerge,’ he told a business summit in Sydney in November.

And only ANZ has signed up to Apple Pay.

‘It could be they just refuse to give up control of what they see as their god given territory,’ Prof Holden said.